For most New Yorkers, paying the bills is a routine chore, an unpleasant but necessary task to keep the

water running and the lights on. New York Citys exclusive water provider, the Department of Environmental Protection (DEP), plays a key role in this routine and has sought to improve billing accuracy by installing more than 800,000 new automated readers in all City homes and businesses. But a comprehensive study by Public Advocate Bill de Blasio, sparked by complaints from 145 home and business owners1, shows these new transmitters can result in inaccurate readings that overcharge residentssometimes by tens of thousands of dollars. Worst of all, red tape puts home and business owners on the hook for paying these unwarranted charges, and often force them into paying money they dont owe with threats of late charges and liens on their property. With a few simple solutions, the City can ensure New Yorkers dont foot the costly bill for the new meter readers technical problems and have a fair process to appeal when a mistake has been made.

Automatic v. Manual Meter Readers

In the winter of 2009, DEP began installing automated meter readers in all homes and businesses across New York, to replace older ones that
Complaints received by the Public Advocates office between January 2010 and April 2012.
1

required physical visits from inspectors. DEP literature emphasized that the new meters come free of charge, and bring no change in the regular billing process. The new meters were designed to: Save the City money by ending physical visits to read a meter; Electronically send water readings to DEP headquarters; Improve billing accuracy by eliminating estimated readings; and Allow ratepayers to track their water usage online.

Estimated vs. Actual Readings: Whats the Difference?

Manual meter readers required a visit from DEP in order to measure water usage for a home or business actual readings were taken when an inspector physically visited and read one. Because inspectors cannot always gain access to a meter during business hours, the Department relies on estimated readings to bill customers, based on the customers water usage in previous billing cycles. When DEP could not physically read a meter, it simply used the customers last actual reading, carried it over to the current billing period, and later updated it during the next one. Automated meters were designed to correct this process, and improve billing accuracy by eliminating estimated readings altogether.

Inaccurate Readings, Huge Costs

Complaints to the Public Advocates office have found the new automated meter readers prone to significant error; New Yorkers often saw their bill skyrocket after the installation of a new automated meter. DEP claims these jumps are the result of leaks or inaccurate old estimated readingsneither of which can explain why many bills return to normal after a single sky-high bill. A closer look at the most severe cases, where a new automated meter resulted in water bills that doubled in cost, shows why:

DEBUNKED: Leaky Pipes

If a pipe leak were responsible for bill increases, those amounts would remain consistently high until the leak was fixed. In the 18 cases where the DEP blamed a leak for water bills doubling after an automated meter was installed, 14 returned to the normal billing amount after one cycle even though no repairs were made. In only one of these cases was a leak discovered.

DEBUNKED: Old Estimates Were Too Low

DEP told 18 customers their onetime sky-high bill was the result of old estimated readings that were too low, meaning customers owed the City for past water usage. If that were the case, the new actual

readings should be consistently higher than old estimated ones. But in half (9) of the cases where DEP blamed big increases on pastunderestimates, the new actual readings were equal to or less than previous estimated amounts*.
*In the remaining 9 cases, the Office of the Public Advocate was unable to verify an increase in the new actual readings.

CASE STUDY: The $53,000 Water Bill

Prior to August 2010, the immigrant owner of a small laundromat in Sheepshead Bay typically paid $5,000 for water bills every three months. But after a new automated meter was installed, her bill skyrocketed to $53,000. When the owner appealed, the DEP contended a leak was responsible for the increase. After six months without action and a second bill for more than $50,000 from the DEP, the owner contacted the Office of the Public Advocate. With additional pressure and photo evidence, the DEP acknowledged a technical problem with the new meter, which had added an extra 0 at the end of its measurement. The $100,000 in unwarranted charges were finally corrected.

Unclear Bills & Unfair Appeals

Customer bills like the one pictured below bring confusion by displaying cancellations, billings, and rebillings without any explanation. In this case, a homeowners bill shot up from $97 to nearly $2,800 after the installation of a new meterwith no explanation.

Even when customers know such drastic increases must be mistakes, and choose to appeal, they are met with a series of bureaucratic hurdles that stack the odds of favorable resolution firmly against them. New Yorkers must: 1. File a written complaint with DEP (and wait for a response within 90 days); 2. File an initial appeal with DEPs Deputy Commissioner, if the decision is unsatisfactory (and wait for a response within 120 days); then 3. File a final appeal with the Water Board.2 The entire process can take up to eight months, during which ratepayers are held responsible for the full cost of the bills. DEP advises New Yorkers to pay all water and sewer charges during the Dispute Resolution Process, even if the bill is unjustified, and warns that Late Payment Charges will continue to accrue until all charges are paid in full. Homeowners and businesses that do not, or cannot afford to pay the bill up front face late charges and even a lien on their property.3

Customer Dispute Resolution Process, NYC Department of Environmental Protection. http://www.nyc.gov/html/dep/pdf/water_sewer/dispute_resolution_overview.pdf. 3 A lien is a legal hold placed on a property. http://www.nyc.gov/html/dep/html/customer_services/lienfaq.shtml.
2

Solutions
With three policy changes, DEP can clarify, simplify and streamline this process for thousands of New Yorkers. Public Advocate de Blasio recommends: 1) Eliminate the possibility of technical error before charges are paid. Whenever a bill goes up by more than 100% after the installation of an automated meter reader, DEP must immediately dispatch an agentat no charge to the ratepayerto inspect the meter and rule out the possibility of a malfunction. A quick inspection will reduce the significant costs to taxpayers of adjudicating an unjustified bill, and save bill-payers a needless months-long appeals process if a technical or billing error is to blame. 2) Dont bully customers into paying charges they dont owe. To ensure New Yorkers have a fair shot at challenging their bills following the installation of an automated meter, the City should not assess late fees or threaten a lien on a property during the appeals process. 3) Put water bills in plain easy to understand language. New charges assessed after an automated meter reader is installed should be clearly labeled. The DEP should replace the confusing cancellations and rebillings with easy to understand language that explains why past bills are being revised.

Office of New York City Public Advocate Bill de Blasio | (212) 669-7200 1 Centre Street, 15th Flr, NY, NY 10007 | www.advocate.nyc.gov